Type 2 diabetes mellitus is associated with increased risk of malignancy (mainly cancer of the pancreas, breast, colon, endometrium and bladder). In addition, there is evidence that antidiabetic medication may itself affect the risk of cancer. Importantly, metformin is nowadays emerging as an agent that has the potential to protect from cancer. Population studies have shown that metformin is associated with a significant reduction of neoplasias in general (and cancer of the breast and prostate, in particular). These observations are supported by in vitro and in vivo evidence that metformin inhibits the growth of cancer cells. The mechanisms underlying this protective potential of metformin are not completely understood. While other mechanisms have also been proposed, the protective action of metformin appears to be exerted by two main pathways. The first involves reduction of endogenous hyperinsulinemia. The second pathway relates to the activation of adenosine monophosphate-activated protein kinase (AMPK), which is recognized to inhibit cellular protein synthesis and growth. Whatever the precise mechanism, any reduction in the risk for cancer may be far-reaching, and this favorable effect adds to the clinical value of metformin as the mainstay of antidiabetic treatment.